Buying Real Estate

1. PRICE: A buyer must first consider whether s/he can afford to buy a home. Financial institutions suggest that no more than 30% of gross income be spent on the purchase of a home. For instance, a person earning a gross income of $1,500.00 per month, should not spend more than $450.00 per month on a mortgage payment and taxes.

2. MANNER OF OWNERSHIP: Please confirm with our office the proper spelling of your name(s) and whether you wish to be described as joint tenants, tenants in common, or in a single name. Joint tenancy means that each party has a 100% ownership in the residence and if one person dies, the other has complete ownership. Tenancy in common means that each individual owns the property in a certain percentage and each person’s percentage passes onto his or her estate upon death.

3. UTILITIES: Make arrangements with the City of Weyburn, SaskPower, SaskEnergy, SaskTel to have all meters read and services transferred into your name, effective of possession date. Please remember City Hall must be contacted concerning water and sewer.

4. TAXES: It may be necessary to reimburse the seller of the property for taxes paid for that part of the year when the buyer owns the property. For example, if the buyer takes possession on October 1^st and the taxes were paid in full for the year, s/he will have to repay the seller for the taxes for October, November and December. Please remember that you must indicate if you are a public or separate school supporter, as we are required to provide this information when we file a Notice of Change of Ownership form with the City of Weyburn.

5. FIRE INSURANCE: Fire insurance must be placed on your new home effective as of possession date. We suggest that insurance be effective the day prior to possession date to ensure there is no break in coverage. We will require a confirmation letter from your fire insurance agent that insurance is in place. We provide you with a form to give to your fire insurance agent.

6. SURVEYOR’S CERTIFICATE: Banks require a Surveyor’s Certificate before advancing funds.

7. STATEMENT OF ADJUSTMENTS: This is prepared from information provided to us. Such information is believed to be correct, however, its accuracy cannot be guaranteed. Please read the Statement of Adjustments very carefully to verify its accuracy and notify us immediately of any error.

8. LIFE INSURING YOUR MORTGAGE: This type of insurance will pay off the mortgage in the event of the death of the policy holder. Remember that mortgage life insurance is not the same as CMHC mortgage loan insurance.

9. POSSESSION: Your real estate agent should obtain all available keys. (You may also wish to consider changing the locks on your new house.) It is wise to do an inspection of the property with your real estate agent to ensure that it is in the same condition as it was on the date you signed your Offer to Purchase. If there is a problem, satisfactory arrangements must be made to repair or replace items. If such arrangements cannot be made, the only remedy available is to commence a court action for compensation. There can be no holdback from your purchase funds to cover damaged or missing articles.

10. ZONING: We have not checked zoning requirements of your property or violations of health, fire, building, municipal or provincial bylaws or ordinances. If you are concerned about any of these, you should check with the appropriate municipal (Weyburn) or provincial authority.

11. EASEMENTS: You ought to be aware that there may be easements, for instance a SaskTel easement or City of Weyburn water main, which restrict construction on the property.

12. ACREAGE: If purchasing an acreage, you should also thoroughly check the septic tank and drinking water.

EXPENSES OF PURCHASING A HOME

1. LEGAL FEES, including: searching and investigating title; preparing documents including the Mortgage; complying with the requirements of your bank or credit union; preparing Statement of Adjustments; collecting and disbursing funds; and, attending with you to review and execute all documents.

2. SURVEYOR’S CERTIFICATE, if required

3. MORTGAGE COSTS

4. FIRE INSURANCE PREMIUMS

5. UTILITY HOOK-UPS.

6. TAX ADJUSTMENTS

7. LAND TITLES’ costs associated with the transfer of Mortgage, Caveat, etc.

8. DISBURSEMENTS such as postage, photocopier and office supplies, courier charges, long distance telephone and fax charges.

9. INTEREST to the vendor, if applicable.

10. GST, if applicable.

11. MISCELLANEOUS On occasion, unexpected costs arise. Examples of such costs are water well certificates and GST concerns. It is the policy of this firm to notify you immediately as to the possibility, and reason, for such unexpected, additional costs.

MORTGAGE TERMINOLOGY

1. AMORTIZATION PERIOD: Length of time it will take to repay fully the mortgage money to the lender.

2. CAVEAT: A warning or notice, registered at Land Titles Office, that a third party has an interest in that property.

3. CLOSED MORTGAGE: A mortgage which does not permit early payment or additional payments, except those allowed in the mortgage. If additional payments are made, it is often in conjunction with payment of a penalty.

4. CMHC MORTGAGE: When a borrower makes a down-payment of less than 25%, the mortgage is considered a high-risk mortgage and the borrower must apply for a CMHC mortgage.

5. CONVENTIONAL MORTGAGE: A loan available when the borrower makes a minimum down-payment of 25%

6. LIEN: A claim registered against the title to secure payment for work done in relation to the property

7. MORTGAGEE: The financial institution, usually a bank or credit union, that lends the mortgage money.

8. MORTGAGE LIFE INSURANCE: To ensure the balance owing on the mortgage will be paid out in the event that the property owner(s) die(s).

9. MORTGAGOR: The borrower of mortgage money, usually the owner or buyer of the property.

10.OPEN MORTGAGE: A mortgage which allows additional payments or early payout of the borrowed funds without penalty.

11. PORTABLE MORTGAGE: Provides flexibility if you move. You can take this Mortgage to your new property without paying a mortgage penalty for early payment.

12. SECOND MORTGAGE: A second or third mortgage is available, if there is sufficient equity in the property. Equity is the difference between the value of the property and the amount owing on a mortgage.

13. TERMS OF A MORTGAGE: The length of time a mortgage runs before it must be renewed.

ASSUMING A MORTGAGE

Consider the following:

1. Must you qualify to assume that mortgage?

2. Is the mortgage paid up to date (in a current position)?

3. When will you start making payments?

4. Will you be assuming a mortgage tax account (in a credit or debit position?)?

5. Is it an open or closed mortgage?

6. Does it contain a portable option?